A. Schulman targets major growth in Asia

By Steve Toloken
News Editor / International

Published: May 13, 2014 12:34 pm ET
Updated: May 13, 2014 12:37 pm ET

Image By: Steve Toloken Derek Bristow, vice president and general manager of Asia Pacific for A. Schulman Inc.

Related to this story

Topics Materials, Materials Suppliers, China, Asia, CHINAPLAS
Companies & Associations A. Schulman Inc.

SHANGHAI — U.S.-based materials firm A. Schulman Inc. has ambitious targets for its Asia business, including actively considering acquisitions and additional manufacturing and research capability, company executives said at the recent Chinaplas trade fair.

While Asia is currently underrepresented in global sales for the company, it wants to grow the region from 10 percent of worldwide operating profits to about 20 percent in five years, said Derek Bristow, vice president and general manager of Asia Pacific for Fairlawn, Ohio-based Schulman.

“That’s going to be organic growth as well as acquisitions,” Bristow said. “There’s a big focus on Asia and particularly China to grow to a critical mass that we need.”

The company is in the midst of a previously announced plan to double capacity at its China compounding plant in Dongguan, Guangdong province, to 50,000 metric tons, adding both engineering plastics and masterbatch capacity. It expects to complete that in six months.

But it’s also looking beyond that at expanding its capacity for color concentrates, either adding lines in Dongguan or setting up a new plant around Shanghai within two years, Bristow said in an interview at Chinaplas, held April 23-26 in Shanghai.

Schulman recently added three small color concentrates production lines in Malaysia, with about 5,000 metric tons of capacity. It’s a new business for it in Asia.

“A. Schulman globally does pretty well with the color business, custom performance colors,” Bristow said. “In Asia until about a year ago we’ve never done any color. So it makes sense for us to get into that. We have the technology from elsewhere.”

Longer-term, Schulman executives said they want to do more research and development work in Asia to better tailor products to local customers.

“We have early plans, and this may take perhaps three or four years, but we do want to set up a more thorough, fundamental R&D capability in Asia, somewhere,” Bristow said. “We haven’t quite determined where that should be but we see the need and we’re planning for it.”

One new product already developed for Asia: A grade of its Papermatch replacement paper material with a much smoother surface for the Japanese market.

“We want to have a lot of newly developed products for the domestic customers,” said Roger Zhao, general manager of the Dongguan factory. “We really put a lot of effort to develop new products for China.”

“The trend we see in Asia is that technology has certainly caught up with the rest of the world and probably overtaking other regions,” Bristow said.

Asia is also fitting into A. Schulman’s broader strategy of growth through acquisitions. In January, the company announced it had filled a new position, a senior director of corporate development to oversee global mergers, acquisitions and divestitures.

Last year, it bought the U.K.-based thermoplastics compounder Perrite Group, which added about 20,000 metric tons of capacity at a former Perrite plant in Malaysia, doubling the size of its engineering plastics capacity in the region, Bristow said.

“We are actively looking at acquisitions but I can’t elaborate on that right now,” he said. “It’s definitely part of our growth strategy.”

It opened its first plant in India last year and will likely add a second production line there in the next 12 months, he said.

Globally, the company had $2.1 billion in sales in its most recent fiscal year ending Aug. 31, from 38 manufacturing sites.

Schulman’s Asia business grew 500 percent in the five years prior to 2013, although from a very small base, and the company is targeting to grow it another three or four-fold by 2018, Bristow said.

“To be honest, our market share is so small that we have a huge upside potential to grow,” he said.


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A. Schulman targets major growth in Asia

By Steve Toloken
News Editor / International

Published: May 13, 2014 12:34 pm ET
Updated: May 13, 2014 12:37 pm ET

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